If you need finance for your startup, you’ll need to create a business plan that convinces lenders that you’re a good risk. Writing a business plan also helps to confirm your goals and ideas, and clarifies where you want to take the business.
They are important documents, but business plans aren’t intended to be static. They should be consulted on a regular basis, and amended to reflect changes in your longer-term plans and strategies.
When thinking about a business plan format, you can make them visual and creative with the inclusion of graphs and charts, but ultimately they need to be easily shareable. So what else do you need to think about in regards to this key document?
Keep it clear and concise
Nobody needs to see reams of detailed information in the body of a business plan. You can attach appendices that direct readers to the financials section, for example, or to other specific data, such as the results of your market research.
Take care with your sales forecasts
Predicting sales can be tricky, and it’s important to be realistic when forecasting. Make sure you include potential weaknesses and threats, or you may lose credibility with funders.
A professional approach
Even if the business plan is only for internal use, you should make it professional by including a contents page, visual displays (such as graphs and charts) to illustrate your forecasts, numbered pages, and an executive summary at the beginning.
Tips for creating a great business plan
Although business plans are used for different purposes, these tips will help to ensure your business plan works well, whatever the circumstances:
- Keep the executive summary concise at the start of the business plan, and consider it a way to immediately engage potential funders
- Lay out the document so it’s easy to read using bullet points, plenty of sub-headings, charts, and visual representations of the points you’re making
- Back up any claims or statements with research – this could be in the form of a link to a trusted website, for example, or printed material attached as an appendix
- Demonstrate your understanding of the market, your competition, and potential customer demographic
- Link business goals with how you intend to achieve them. You can do this by connecting the business objectives section with marketing and sales
- You don’t necessarily need to include a full SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, but do reference the potential threats your business faces, as this will increase your credibility and may address the concerns of lenders
The old adage that first impressions count does apply here. If financiers are reading numerous business plans, you’ll need to include your key points succinctly, so they have a clear idea of what you’re asking for, and will be able to gauge their interest.
Even if you’re not seeking funding, creating a business plan will clarify why you’re setting up in business, and how you’ll achieve your goals. It provides a reliable path to follow, and should be a regular point of reference on your startup’s journey.